1. If a firm's net profit margin is 5.0%, its total asset turnover is 2.2 times, and its debt

ratio is 25%, its return on equity is:

11.25%

9.38%

12.86%

12.00%

16.50%

None of the values in this list are correct.

2. If a firm's net profit margin is 1.5% and its total asset turnover is 2 times, its return

on assets is:

3.0%

4.8%

5.4%

6.0%

8.0%

None of the values in this list are correct.

3. Assume you are given the following relationships for the WindChart Company:

Return on assets (ROA) = 15%

Return on equity (ROE) = 50%

Compute WindChart's debt ratio.

30%

40%

70%

60%

50%